Consumer Confidence Is All-Important

The greatest question in the cattle business right now is how the erosion in consumer confidence will affect beef demand?

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The greatest question in the cattle business right now is how the erosion in consumer confidence will affect beef demand? Initially, I was very hopeful that the close of the election cycle would bring an uptick in consumer confidence as media coverage turned more positive.

I also assumed the Obama team would focus on restoring consumer confidence going into the crucial holiday season. However, the Obama transition strategy seems to be to use the time between the election and the inauguration to lower expectations. Thus, any improvement will be seen as major progress.

I can’t argue with the wisdom politically of lowering the bar so much that any uptick can be viewed as a great victory. Certainly, very high expectations are a problem for any incoming administration.

Hopefully, continuing to make the case that we face unprecedented foreign policy challenges, and the worst financial situation since the Great Depression, are part of a short-term strategy. Once in office, I’m sure the rhetoric will change and the media will be very be receptive, which can’t come soon enough. After all, consumer confidence will be crucial for both beef demand and the overall economy.

But brace yourself for some interesting times. As Jonathan Weisman writes in the Wall Street Journal this week: “From autos to energy to banking, President-elect Barack Obama is promising to intervene in the economy in ways that Washington hasn't tried since the 1970s, favoring some industries and products while hobbling others.” (See the article at online.wsj.com/article/)

And Rahm Emanuel, Obama’s newly named chief of staff, told business leaders Tuesday that "You never want a serious crisis to go to waste," calling the current economic crisis: "an opportunity to do things you could not do before.”

Interestingly, however, a Rasmussen poll released today found that 70% of Americans are “not very confident” or “not at all confident” that U.S. policymakers know what they’re doing in regard to the economy. And that percentage is essentially the same among respondents, regardless of party affiliation.